Cryptocurrencies are very popular today, and most people have at least heard of them, even though they may not truly understand them. The technology has helped to transform payment systems and increase performance in a range of different industries in the high-tech fields.
While Bitcoin is the most well-known of the cryptocurrencies out there, you will find that there are quite a few other options available today, and more of those will fall into either centralized or decentralized currencies. While there may be miners for both, these cryptocurrencies are kept separate because, while they have many similarities, they are fundamentally different.
When Bitcoin was created, the idea was for it to be decentralized because it would have the potential to be more resilient than other forms of currency, and to allow for more freedom. The decentralized market contains a number of cryptocurrencies, with the most prominent being Bitcoin, and then Ether and Ripple. Their effect on digital currency over the last decade has been felt around the world, and it has certainly been felt by banks and governments.
Because of the rise of decentralized digital currency mainly due to mining, many banking institutions have started to utilize similar technologies. While many banks were skeptical at first, they eventually saw that it had a substantial amount of potential, and they wanted to create centralized versions of it. Some of the most prominent centralized currencies include the Utility Settlement Coin, and Citicoin, which comes from CitiBank. In addition to banks, governments have also sought to follow a digital currency model. Many countries, including the United States and Russia, are creating their own centralized digital currencies.
What Are the Main Differences?
Those who are interested in cryptocurrency are likely going to want to know more about the advantages that might be had from the different options between centralized and decentralized currency. Those who are mining are typically going to stick with some of the tried and true decentralized options, such as Bitcoin, as it has proven itself time and again.
Another factor to consider when it comes to cryptocurrency is security in the online arena. These currencies are supposed to be highly secure, as it is part of the draw. The decentralized currencies, because they have no central structure or authority holding them in place, tend to be safer in this regard. Centralized systems tend to be more of a target. That’s not to say that attacks can’t take place on a decentralized system, but only that they tend to be rarer.
Centralized systems do have an advantage when it comes to accountability. There will be a single entity that can look at all of the transactions and hold people accountable when they are being fraudulent or laundering money, for example.
Pros and cons exist in both of these systems. For the miners out there seeking great Bitcoin mining hosting services though, right now is still a good time to work with the decentralized cryptocurrencies, as they still have quite a bit to offer.